These are expenses that are incurred in the performance of the duties of the employment and are directly related to the 'nature of the employee's employment'. A standard flat rate expenses allowance (deduction) is set for various classes of employee.
The amount of the deduction is agreed between Revenue and representatives of groups or classes of employees (usually the employees are represented by trade union officials). The agreed deduction is then applied to all employees of the class or group in question.
See Revenue's Flat Rate Expenses List.
Payments made to the employee which are no more than reimbursement of vouched expenses, actually incurred by the employee in performing the duties of the employment, should not be treated as pay. Expenses which are not treated as pay must not only be actually incurred in the performance of the duties of the employment but must also be wholly, exclusively and necessarily so incurred. Expenses which are incurred by employees in travelling to and from the place of employment are not allowable for tax purposes and any re-imbursement of these expenses must be treated as pay and taxed accordingly.
Some employees use their private cars for business purposes. Re-imbursement of motoring expenses incurred can be dealt with in various ways. Please note that round-sum motoring expenses payments are taxable and are treated as pay.
Re-imbursement of Motoring Expenses by Flat-Rate Kilometric allowances
Where employees use their private cars for business purposes, re-imbursement in respect of allowable motoring expenses can be made by way of flat-rate kilometric allowances. There are two types of kilometric allowance schemes which are acceptable for tax purposes, if an employee bears all the motoring expenses:
Motor cars rates per Kilometre - effective from from 1 April 2017
|Official Motor Travel in a calendar year||Engine Capacity: Up to 1,200 cc||Engine Capacity: 1,201 cc to 1,500 cc||Engine Capacity: 1,501 cc and over|
|Up to 1,500 km||37.95 cent||39.86 cent||44.79 cent|
|1,501 - 5,500 km||70.00 cent||73.21 cent||83.53 cent|
|5,501 - 25,000 km||27.55 cent||29.03 cent||32.21 cent|
|25,001 km and over||21.36 cent||22.23 cent||25.85 cent|
Payments by an employer which do no more than re-imburse an employee for allowable subsistence expenses which were actually incurred, may be made tax-free in certain circumstances, in accordance with legislation. The expenses concerned must have been incurred "wholly, exclusively and necessarily" in the performance of the duties of the employment.
Employers are reminded that round-sum subsistence expenses payments are taxable in full and must be treated as pay. Where an employee performs the duties of the employment while temporarily away from his/her normal place of work or is working abroad on a foreign assignment, allowable subsistence expenses can be re-imbursed by the employer on the basis of:
Acceptable flat-rate allowances (Civil Service rates or Re-imbursement of subsistence expenses based on any other schedule of rates and related conditions.
Domestic Subsistence Rates
|Night Allowances (2018)||Day Allowances (2019)|
|Domestic Subsistence Rates||Normal rate||Reduced rate||Detention rate||10 Hours or more||5 Hours but < 10 Hours|
Domestic day subsistence rates (from 1 July 2019)
The assignment must be outside eight kilometres of the employee's home or normal place of work.
You can only claim both a day and overnight allowance if you work five hours or more the next day.
Domestic overnight subsistence rates have not been revised since 1 October 2018.
This allowance covers an overnight assignment of up to 24 hours. This must be at least 100km from the employee's home and their normal place of work.
There are detailed rules and conditions governing the payment of subsistence allowances in the Civil Service. The following notes are indicative of some of the relevant provisions.
An overnight allowance covers a period of up to 24 hours from the time of departure, as well as any further period not exceeding 5 hours, which is necessarily spent overnight away from the normal place of work. Where an absence exceeds 24 hours, a day allowance at the appropriate rate may be paid only if the last period of 24 hours is exceeded by 5 or more hours.
This is payable for absences up to 14 nights.
This is payable for each of the next 14 nights.
This is payable for each of the next 28 nights.
Absences Over 56 Nights
Employers should make application to the appropriate Revenue office with a view to agreeing the rate to be applied.
The period of subsistence at any one location is limited to six months. Any departure from this position e.g. for continuation of the subsistence period for a short duration, is considered on the circumstances of the individual case.
Period of 5 to 10 hours absence & Period of over 10 hours absence. A day allowance applies to continuous absence of 5 hours or more, provided the absence is not at a place within 8 kilometres (5 kilometres prior to 1st July 2015) of the employee’s home or normal place of work. There are two categories of day allowance, namely, 5 to 10 hours absence and over 10 hours absence.
Read our Blog on Travel & Subsistence - A Revenue perspective.
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